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In August 2011 Apple became the world’s most valuable company overtaking Exxon Mobile, with a market capitalisation of $337 Billion compared to Exxon $331 Billion. Now that Steve Jobs is no longer driving the vision for Apple, can it maintain its market leadership, competitive edge and unique selling proposition?
Apple has overtaken arch-rival Microsoft to become the world’s biggest technology company. At the end of May Apple was valued at $222bn compared to Microsoft, which is now valued by investors at $219bn. However, Microsoft still enjoys higher profits than Apple. Its most recent annual net profit was $14.6bn compared with $5.7bn for Apple.
This change caps one of the most stunning turnarounds in business history for Apple, which had been given up for dead only a decade ago. The rapidly rising value attached to Apple by investors also heralds an important cultural shift: consumer tastes have overtaken the needs of business as the leading force shaping technology. Although Apple still sells computers, twice as much revenue is coming from its hand-held devices and music. The technology industry sold about 172 million smartphones last year, compared with 306 million PCs, but smartphone sales grew at a pace five times faster.
It has emerged that one of Apple iPad’s most important component may be the A4, the fingernail-size chip at the tablet’s heart. With the A4, Apple has taken another step toward challenging the norms of the mobile device industry. Device makers typically buy their primary chips from specialized microprocessor companies. But for the iPad, Apple chose to design its own — creating unique bonds between the chip and Apple’s software. This approach moves away from outsourcing to specialist manufacturers and has considerable financial and manufacturing risks. Why have Apple taken this approach and can it be successful? The question for Business and Management -is ‘make or buy’?
The do-it-yourself approach gives Apple the chance to build faster, more battery-friendly products than rivals and helps the company to keep product development secret. However, designing its own processors burdens Apple with additional engineering costs and potential product delays. It also forces the company to hire — and retain — experienced chip designers. Several who joined the company in 2008 after an acquisition have already left for a secretive start-up.
Well it’s here – the much hyped new tablet from Apple, designed to revolutionise the way we access the internet. Lighter than a netbook at 1.5lbs, it is more portable, but at ten inches long and half an inch wide its not something you can exactly put in your pocket. Its designed to change the way we view movies and TV… and of course, play games. But from a business point of view one of the most exciting aspects is that it is designed to rival the Kindle e-Reader. Indeed, Apple unveiled a new software application called, not surprisingly, iBooks and announced a new online partnership with five large publishers called, you’ve guessed it , iBookstore.
The device only has one button on the whole machine – the home button, with the same function as that on the iPhone. However, just like the iPhone. it still cannot multitask and move between applications like the Palm Pre. The new gadget is competitively priced and on launch will cost only $499. So will I buy one? iGuess so.
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